Indian Market - Free Essay Example

Sample details Pages: 3 Words: 966 Downloads: 2 Date added: 2017/09/23 Category Advertising Essay Type Argumentative essay Tags: India Essay Did you like this example? Introduction Indian Aviation sector in the post-liberalization period can be divided into two phases: 1992-99, when six major private airlines took to the sky and post-2000 – witnessing a new breed of airlines jostle for their share of the sky. In 1992-93 the entry of new players in Indian Civil Aviation Industry was facilitated because of change in environmental factors. Two of the most important changes were: deregulation for private sector and the relaxation in rules regarding fleet size. Banking on them, many players, backed by NRIs, jumped into the fray. A majority of these players had a start up project as little as Rs. 0-60 cr, for it was not mandatory for the operators to own the fleet. Additionally, these ventures had neither the experience nor concrete business models (considered essential for running an aviation company successfully). As a consequence, a large percentage of these companies collapsed. Out of six major airlines that took off (in all 17 airline s) only two survived. The remaining left behind huge liabilities to oil companies and the Airport Authority of India. In the second phase of post-2000, there are as many as 10 players that have already started operations in the domestic sector of the country. The moot question that remains now is: With new age carriers waiting to zoom in again, will history be repeated? Revolutionized by liberalization, the aviation sector in India has been marked by fast-paced changes in the past few years. From being an expensive service that only a few could afford, the sector has now graduated to being a fiercely competitive industry with the presence of a number of private and public airlines and several consumer-oriented offerings (Table 1 presents the market share of major domestic players from 1953 to 2006). Table 1: Market Share of Major Domestic Players CarrierLaunch YearMarket Share (%)Net ProfitFleet SizeStrategy Indian195317. 957. 2*75FSC Jet Airways199334† 27. 94**64FSC Air Deccan200319. 8–246. 5#44LCC Spice Jet20058. 1–41. 4##9LCC Kingfisher20059. 8NA31FSC Go Air20054. 8NA5LCC Paramount20051. 4NA5Value Carrier Indi Go20064. 2NA11LCC Note: All Net profit figures are Rs. in Cr. ; FSC – Full Service Carrier; LCC – Low Cost Carrier; Market Share figures are for the quarter ended Dec. 006; †  The figure is the combined market share of Jet Airways and Air Sahara; * The net profit figures are for the year 2005-06; ** The figure is for the year ended March 31, 2007; # The figure is the unaudited result for the nine months ended March 31, 2007; ## The figure is for the year ended May 31, 2006. Source: Indian Management, August, 2007. The promise and the potential of the Indian aviation market are awesome. By 2010, India’s fleet strength will stand at 500-550; the domestic market size will cross 60 million and international traffic 20 million. Airbus pegs India’s demand for airliners at 1,100 aircraft, worth $10 5 bn, over the next 20 years. According to Civil Aviation Minister Praful Patel, the country will need 1,000 passenger planes in 10 years, up from 260 now. The Centre for Asia Pacific Aviation (CAPA) projections show India as potential ten airline market, consisting of two-three Full Service Carriers (FSC), two-three large national Low Cost Carriers (LCC) operating a fleet of more than 70 aircraft each, and three-four niche regional operators with aircraft less than 80 seats. With airport infrastructure being upgraded, non-aeronautical revenues will contribute almost 50% to the revenue of airports. Here, private players are planning malls, hospitality chains, book shops, duty-free shops, Internet cafes, lounges and entertainment centers. With the sector expanding at a fast pace, the number of aircraft being used is on the rise and so is the need for pilots. Not surprisingly, aviation school is the latest buzzword among students, as India would require 7,500-8,000 pilots and an eq ual number or more of air cabin crew by 2010. Heavy pay packets are awaiting pilots with a Commercial Pilot License (CPL). In this emulous scenario, it has become imperative for domestic airlines to understand the consumer-buying behavior of their current and potential customers so that they may develop appropriate marketing strategies in the emerging competitive market. Internal Analysis Staff (mainly air hostesses and stewards) plays an integral role in the service mix of any company. Perceptual mapping shows Kingfisher staff to be more attractive with high appeal and Spice Jet with more attractive but low appeal. Kingfisher’s promotion of staff as a USP created the difference. Jet Airways’ staff with average attractiveness is perceived to be of high appeal. Indian staff was found to be least attractive, but its appeal was perceived as high. Air Deccan’s staff is perceived to be less attractive with low appeal. External Analysis In a nutshell, it will be interesting to see the battle between traditional full service carriers (FSC) like Indian, Jet Airways, Kingfisher and the LCC airlines like Air Deccan and Spice Jet. Both the segments are flourishing at the moment. LCCs should not be viewed as competitors to FSC, rather they are complementary. These LCCs have in fact expanded the market size. Industry estimates forecast that LCCs will have a market share of 70% by 2010, which could be the highest in the world. With the amalgamation of Indian Airlines and Air India into National Aviation Company of India Limited (NACIL) as well as the mega merger of Jet Airways and Air Sahara (Sahara renamed as Jet Lite now), the competition will be even more intense. Some players like Paramount are working in niche area (on selected routes only) and are erforming well. Other airlines also need to develop their own USP. Customers in India are now more aware and have a wide variety of choices. As Centre for Asia Pacific Aviation (CAPA) projects, India is potentially a ten airline market, consisting of two-three FSC, two-three large national LCCs operating a fleet of more than 70 aircraft each, and three-four niche regional operators with aircraft less than 80 seats. The aviation market is mature now and India is ready to take off. ? Porters Five force model Don’t waste time! Our writers will create an original "Indian Market" essay for you Create order